Timeline Strategy Consulting's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/255967/comments http://seekingalpha.com/article/180146-apple-islate-delivery-delayed?source=feed#comment-824689 824689
Furthermore, the margins on the tablet are, at least initially, likely to be closer to the 25-35% range of Apple's computer products, rather than the 50% range of iPhone, meaning that the profit contribution is further diluted. Perhaps content delivery will make this product a franchise, but even there, it's hard to keep up with the App Store that is now accessible for 70 million iPhones and iPod touch devices.

The business press has been quick to attach this tablet introduction to Apple's recent share price increase, but the math does not support this assertion. Yes, it may help Apple's finances, and it keeps Apple moving into new disruptive areas, but the real cash cow is iPhone and that is unlikely to change dramatically for the near term.]]> Tue, 29 Dec 2009 08:42:45 -0500
Furthermore, the margins on the tablet are, at least initially, likely to be closer to the 25-35% range of Apple's computer products, rather than the 50% range of iPhone, meaning that the profit contribution is further diluted. Perhaps content delivery will make this product a franchise, but even there, it's hard to keep up with the App Store that is now accessible for 70 million iPhones and iPod touch devices.

The business press has been quick to attach this tablet introduction to Apple's recent share price increase, but the math does not support this assertion. Yes, it may help Apple's finances, and it keeps Apple moving into new disruptive areas, but the real cash cow is iPhone and that is unlikely to change dramatically for the near term.]]> http://seekingalpha.com/article/177460-nokia-look-ahead-to-december-2009-quarterly-results?source=feed#comment-799404 799404
Perhaps they can shrink their way to profitability, but there is no growth.

I'll stick a stake in the ground with NOK at $12.58 and AAPL at $197.80, and say that AAPL is still undervalued.]]> Thu, 10 Dec 2009 06:36:09 -0500
Perhaps they can shrink their way to profitability, but there is no growth.

I'll stick a stake in the ground with NOK at $12.58 and AAPL at $197.80, and say that AAPL is still undervalued.]]> http://seekingalpha.com/article/174260-what-are-the-best-hedge-funds-buying-now?source=feed#comment-766978 766978 Thu, 19 Nov 2009 08:30:54 -0500 http://seekingalpha.com/article/174255-amazon-apple-stock-going-vertical-this-never-ends-well?source=feed#comment-766921 766921
If Apple posts a highly-reasonable EPS of $2.10 for their FY10 Q1, which ends in December, that will reset their trailing full year earnings to $6.61. They will also post a $3.5 billion addition of cash and equivalents to the balance sheet, meaning that they hold $40 billion or so in cash - equivalent to 18% of their $180 billion market cap.

During some period in the future, $205 will look very cheap, if you have the stomach to deal with the stock's oscillations and the market's corrections here and there.

And, a detail. The company you refer to as 'Price Line' is either 'priceline' or 'Priceline'. Details matter when you are writing and you should attempt to get them right.]]> Thu, 19 Nov 2009 07:45:07 -0500
If Apple posts a highly-reasonable EPS of $2.10 for their FY10 Q1, which ends in December, that will reset their trailing full year earnings to $6.61. They will also post a $3.5 billion addition of cash and equivalents to the balance sheet, meaning that they hold $40 billion or so in cash - equivalent to 18% of their $180 billion market cap.

During some period in the future, $205 will look very cheap, if you have the stomach to deal with the stock's oscillations and the market's corrections here and there.

And, a detail. The company you refer to as 'Price Line' is either 'priceline' or 'Priceline'. Details matter when you are writing and you should attempt to get them right.]]> http://seekingalpha.com/article/173531-the-power-of-instant-approval?source=feed#comment-761876 761876
If the tension for change is so high, and the developer payoff exists elsewhere, the developers will go elsewhere.

I don't, as yet, see a similar marketplace where a developer will have access to 60 million devices from one version of a program, with that number increasing quarterly by a double-digit percentage.

There's always this "wait until this or that happens, we'll show you then" complaining about Apple but none of it diminishes the consumer appeal, and thus the sales, and thus the install base. And that's the hand that turns the crank.

Developers simply need to know this - Apple doesn't really care about their feelings. They should just keep their heads down and do good work and they might be rewarded. And if they want to go ride the unicorns in Android Land, that's up to them.

They should just know that each unicorn is different, and they will need to have a different riding style for each one, and that some riding styles are not compatible with some unicorns. They'll figure all of that out after a few years with all the different unicorns that come and go in Android Land. Every holiday season there will be a whole new crop of unicorns and your old riding style may need some modifications, but it's all good because everything is happy in no-rules Android Land.

And just tell them to ignore the fact that by 2012, when they have figured out how to ride 10 or 15 different unicorns, that there will be 150 million identical Apple devices in real customer's hands, each of them tied to an iTunes account that has a credit card.

Good luck with the Unicorns, suckers.]]> Mon, 16 Nov 2009 09:20:42 -0500
If the tension for change is so high, and the developer payoff exists elsewhere, the developers will go elsewhere.

I don't, as yet, see a similar marketplace where a developer will have access to 60 million devices from one version of a program, with that number increasing quarterly by a double-digit percentage.

There's always this "wait until this or that happens, we'll show you then" complaining about Apple but none of it diminishes the consumer appeal, and thus the sales, and thus the install base. And that's the hand that turns the crank.

Developers simply need to know this - Apple doesn't really care about their feelings. They should just keep their heads down and do good work and they might be rewarded. And if they want to go ride the unicorns in Android Land, that's up to them.

They should just know that each unicorn is different, and they will need to have a different riding style for each one, and that some riding styles are not compatible with some unicorns. They'll figure all of that out after a few years with all the different unicorns that come and go in Android Land. Every holiday season there will be a whole new crop of unicorns and your old riding style may need some modifications, but it's all good because everything is happy in no-rules Android Land.

And just tell them to ignore the fact that by 2012, when they have figured out how to ride 10 or 15 different unicorns, that there will be 150 million identical Apple devices in real customer's hands, each of them tied to an iTunes account that has a credit card.

Good luck with the Unicorns, suckers.]]> http://seekingalpha.com/article/173476-playing-the-options-game-in-rim-cel-sci-not-yet-trading-to-its-potential?source=feed#comment-761785 761785
Oh, I don't know, sounds like it's on the up and up to me.]]> Mon, 16 Nov 2009 08:15:50 -0500
Oh, I don't know, sounds like it's on the up and up to me.]]> http://seekingalpha.com/article/173492-apple-to-open-50-more-stores-let-s-be-careful-steve?source=feed#comment-761626 761626
Oh, and that Disney company.

He promised to run any major decisions by you in the future, umkay? He'll call you.]]> Mon, 16 Nov 2009 06:44:15 -0500
Oh, and that Disney company.

He promised to run any major decisions by you in the future, umkay? He'll call you.]]> http://seekingalpha.com/article/172416-the-future-is-mobile-telecom-returns?source=feed#comment-753494 753494
That might be one of the best mixed metaphors that I have ever read.

However, I prefer to make hay while the ball's in my court.]]> Tue, 10 Nov 2009 06:30:50 -0500
That might be one of the best mixed metaphors that I have ever read.

However, I prefer to make hay while the ball's in my court.]]> http://seekingalpha.com/article/171956-europe-s-biggest-newspaper-forcing-purchase-of-its-iphone-app?source=feed#comment-749722 749722

On Nov 06 11:56 PM KACER wrote:

> Stupid Europian]]> Sat, 07 Nov 2009 09:09:41 -0500

On Nov 06 11:56 PM KACER wrote:

> Stupid Europian]]> http://seekingalpha.com/article/171761-research-in-motion-still-the-best-positioned-smartphones-play?source=feed#comment-747598 747598
However......I'm guessing that out of 5 people who carry Blackberries, perhaps 2 will appreciate the blog that you reference. This means that 3 out of 5 are candidates for switching to something else, be it iPhone, Droid, whatever. That's a problem for RIM. They have no current solution for this problem, and I'm guessing - based upon their track record of introducing the same thing with some slight improvement - that they have nothing substantial in the pipeline.

If the RIM argument comes down to safety and security that mandates acceptance by large corporations.....well, that sounds a lot like a utility company and not a technology company.

People assume that iPhone sales are rising because overall smartphone sales are rising. I would go a step further and suggest that smartphones sales are rising precisely BECAUSE iPhone sales are rising. iPhone has raised expectation levels for all smartphones, not just those made by Apple. In this manner, it has pulled the market along with it, by forcing handset makers to develop more quickly in order to survive. Touch screens, app stores, browsing, syncing, GPS, and other iPhone features have raised the bar, and handset makers who have embraced this future have a realistic chance to outperform the competition.

I am afraid that RIM does not show that urgency.

And if you think that Apple is not working on many of the legitimate issues, then you're looking at a different company than I am. Probably the biggest of them, battery life, is a tough nut to crack because it's pushing the limits of physics. I would suspect that battery life for all devices is a very hot topic at Apple.

Go Google another arcane reference from a non-switcher. I bet I can find 10X more in the other direction.]]> Fri, 06 Nov 2009 07:55:50 -0500
However......I'm guessing that out of 5 people who carry Blackberries, perhaps 2 will appreciate the blog that you reference. This means that 3 out of 5 are candidates for switching to something else, be it iPhone, Droid, whatever. That's a problem for RIM. They have no current solution for this problem, and I'm guessing - based upon their track record of introducing the same thing with some slight improvement - that they have nothing substantial in the pipeline.

If the RIM argument comes down to safety and security that mandates acceptance by large corporations.....well, that sounds a lot like a utility company and not a technology company.

People assume that iPhone sales are rising because overall smartphone sales are rising. I would go a step further and suggest that smartphones sales are rising precisely BECAUSE iPhone sales are rising. iPhone has raised expectation levels for all smartphones, not just those made by Apple. In this manner, it has pulled the market along with it, by forcing handset makers to develop more quickly in order to survive. Touch screens, app stores, browsing, syncing, GPS, and other iPhone features have raised the bar, and handset makers who have embraced this future have a realistic chance to outperform the competition.

I am afraid that RIM does not show that urgency.

And if you think that Apple is not working on many of the legitimate issues, then you're looking at a different company than I am. Probably the biggest of them, battery life, is a tough nut to crack because it's pushing the limits of physics. I would suspect that battery life for all devices is a very hot topic at Apple.

Go Google another arcane reference from a non-switcher. I bet I can find 10X more in the other direction.]]> http://seekingalpha.com/article/171761-research-in-motion-still-the-best-positioned-smartphones-play?source=feed#comment-747525 747525
You're obviously smart, you are managing other people's money. I really don't understand why it's not obvious to people like yourself, when you look into the future, to see how RIM will have trouble staying viable. Perhaps you are on the East Coast, on the Verizon network, and surrounded by people with Blackberries, so you have a bias. They are swimming against the tide for many different reasons: (1) Lack of touchscreen devices, despite obvious market direction toward touchscreens; (2) very slow development in apps; (3) heavily tied to one carrier, Verizon, who sees the writing on the wall and is pushing Android to compete with iPhone; (4) serious hardware limitations.

Mentioning this or that acquisition that RIM has done, or their supposed 'innovation' is not going to cut it. They should have been innovating in 2005 when they had the lead. Now they are playing catchup like a bunch of other sad-sack companies, trying to be belle of the ball once again. Why should I bet on RIMM with my investment dollars, when I could choose MOT - who clearly acted with urgency - or AAPL?

Can you honestly tell me what RIMM will report on December 17th? Because I have no idea. What will be the stock price on December 18th and why should I think it won't be cheaper then?

Riddle me this - if many people prefer anything other than AT&T, and Verizon accounts for 1/3 of RIM's sales, what happens when iPhone goes to another U.S. carrier? What happens today - on Verizon - when the Droid is another option? How many fewer Blackberries get sold then?

Look into the future man, it's clear as day. When the CEO of a company is off trying to buy hockey teams, his head's not in the game.

Good thing they have another CEO for a spare. Just another buy-one-get-one-free deal from Blackberry.]]> Fri, 06 Nov 2009 05:28:32 -0500
You're obviously smart, you are managing other people's money. I really don't understand why it's not obvious to people like yourself, when you look into the future, to see how RIM will have trouble staying viable. Perhaps you are on the East Coast, on the Verizon network, and surrounded by people with Blackberries, so you have a bias. They are swimming against the tide for many different reasons: (1) Lack of touchscreen devices, despite obvious market direction toward touchscreens; (2) very slow development in apps; (3) heavily tied to one carrier, Verizon, who sees the writing on the wall and is pushing Android to compete with iPhone; (4) serious hardware limitations.

Mentioning this or that acquisition that RIM has done, or their supposed 'innovation' is not going to cut it. They should have been innovating in 2005 when they had the lead. Now they are playing catchup like a bunch of other sad-sack companies, trying to be belle of the ball once again. Why should I bet on RIMM with my investment dollars, when I could choose MOT - who clearly acted with urgency - or AAPL?

Can you honestly tell me what RIMM will report on December 17th? Because I have no idea. What will be the stock price on December 18th and why should I think it won't be cheaper then?

Riddle me this - if many people prefer anything other than AT&T, and Verizon accounts for 1/3 of RIM's sales, what happens when iPhone goes to another U.S. carrier? What happens today - on Verizon - when the Droid is another option? How many fewer Blackberries get sold then?

Look into the future man, it's clear as day. When the CEO of a company is off trying to buy hockey teams, his head's not in the game.

Good thing they have another CEO for a spare. Just another buy-one-get-one-free deal from Blackberry.]]> http://seekingalpha.com/article/170801-apples-to-apples-will-history-repeat-itself-as-android-gains-on-the-iphone?source=feed#comment-742054 742054
First, the iPhone camera is not rubbish. Limited it may be, but it does take very nice pictures in the right conditions. If it were so terrible, it would probably not be the second most popular camera - of all types - on Flickr. Furthermore, the app choices for picture processing make it a very interesting camera with which to be creative, and cover up some of the technical limitations. Nonetheless, if you have no ability to consider the conditions of a shot, perhaps it's your photography skills and not the camera that are rubbish.

Second, iPhone may have been a 'fashion item' or 'cult' object 2 years ago, but again no longer. 60 million devices in use make it a powerful, flexible force that can be all things to all users thanks to the customization that apps provide. As an affirmation of the platform's value, compare used iPhone prices with prices of other handheld devices at gazelle.com. iPhone OS devices will be reused in higher percentages than any other device. This fact, plus the fact that Apple is now selling the better part of 10 million (iPhone plus iPod touch) per quarter, make the math impossible to ignore. Can you really argue your way out of the 60 million vs. less than 5 million paradox?

Third, you make it sound as if it's an aggressive strategy that has all those handset manufacturers converting to Android. Wrong. Those companies are moving out of desperation. A few of them won't even be in this industry in 2 years, and half will be gone in 5. Just watch. That's how much iPhone has changed expectations and the playing field.

I think if Android had made a major push in 2007 or 2008, perhaps they could gain a significant position, but the horse has left the barn. It will grow to some middling platform that is not terribly profitable for anyone involved, and will have just enough device sales to keep it modestly interesting for the top few sellers.

Finally, the observation that Apple is now in a position to repeat its previous behavior - snatching defeat from the jaws of victory - is now the argument du jour used by bloggers who are predicting Android success. Technical details aside, how many credit card numbers and customer accounts did Apple have in 1985? How many does it have now?

(Hint - it's 100 million and growing by 5% per quarter). That's the power of the platform, and that's a big part of why they will not lose again.]]> Tue, 03 Nov 2009 08:50:48 -0500
First, the iPhone camera is not rubbish. Limited it may be, but it does take very nice pictures in the right conditions. If it were so terrible, it would probably not be the second most popular camera - of all types - on Flickr. Furthermore, the app choices for picture processing make it a very interesting camera with which to be creative, and cover up some of the technical limitations. Nonetheless, if you have no ability to consider the conditions of a shot, perhaps it's your photography skills and not the camera that are rubbish.

Second, iPhone may have been a 'fashion item' or 'cult' object 2 years ago, but again no longer. 60 million devices in use make it a powerful, flexible force that can be all things to all users thanks to the customization that apps provide. As an affirmation of the platform's value, compare used iPhone prices with prices of other handheld devices at gazelle.com. iPhone OS devices will be reused in higher percentages than any other device. This fact, plus the fact that Apple is now selling the better part of 10 million (iPhone plus iPod touch) per quarter, make the math impossible to ignore. Can you really argue your way out of the 60 million vs. less than 5 million paradox?

Third, you make it sound as if it's an aggressive strategy that has all those handset manufacturers converting to Android. Wrong. Those companies are moving out of desperation. A few of them won't even be in this industry in 2 years, and half will be gone in 5. Just watch. That's how much iPhone has changed expectations and the playing field.

I think if Android had made a major push in 2007 or 2008, perhaps they could gain a significant position, but the horse has left the barn. It will grow to some middling platform that is not terribly profitable for anyone involved, and will have just enough device sales to keep it modestly interesting for the top few sellers.

Finally, the observation that Apple is now in a position to repeat its previous behavior - snatching defeat from the jaws of victory - is now the argument du jour used by bloggers who are predicting Android success. Technical details aside, how many credit card numbers and customer accounts did Apple have in 1985? How many does it have now?

(Hint - it's 100 million and growing by 5% per quarter). That's the power of the platform, and that's a big part of why they will not lose again.]]> http://seekingalpha.com/article/169374-cramer-s-stop-trading-how-apple-can-get-past-200-10-27-09?source=feed#comment-733663 733663
We'll just wait for Kelloggs to make the future for us. They have a strong history of innovating all manner of sugar spraying and Froot Looping technology to see us through this recession.]]> Wed, 28 Oct 2009 08:31:30 -0400
We'll just wait for Kelloggs to make the future for us. They have a strong history of innovating all manner of sugar spraying and Froot Looping technology to see us through this recession.]]> http://seekingalpha.com/article/164983-with-vonage-app-apple-isn-t-even-bothering-to-lie-anymore?source=feed#comment-704669 704669 Tue, 06 Oct 2009 05:26:25 -0400 http://seekingalpha.com/instablog/212702-h-j-huneycutt/27065-is-buying-apple-today-like-buying-microsoft-in-1998?source=feed#comment-685856 685856
Please publish another article so Apple can rise another 7% in 10 days.

Oh, and while you're at it, you may want to look at the financial basis of why Apple is rising. There's a reason, and it's not just traders, hedge funds, speculation, etc. Apple is quite likely on the precipice of $10 or more annual EPS, which of course re-jiggers the share price north of $200. As I have said months ago, $250 becomes quite likely, and sooner rather than later. There are tens of billions of investment dollars from all over the world that will be chasing this stock. Just watch.]]> Tue, 22 Sep 2009 04:45:27 -0400
Please publish another article so Apple can rise another 7% in 10 days.

Oh, and while you're at it, you may want to look at the financial basis of why Apple is rising. There's a reason, and it's not just traders, hedge funds, speculation, etc. Apple is quite likely on the precipice of $10 or more annual EPS, which of course re-jiggers the share price north of $200. As I have said months ago, $250 becomes quite likely, and sooner rather than later. There are tens of billions of investment dollars from all over the world that will be chasing this stock. Just watch.]]> http://seekingalpha.com/article/162341-is-the-time-right-for-nokia?source=feed#comment-684608 684608
Nokia's problems are only too clear. Those 'economies of scale' that will make them so profitable in the future? Good luck with them, because they come shackled to a corporate bureaucracy that calls press conferences and makes PR announcements instead of executing anything.

Apple makes innovation look so simple and straightforward that it's easy to think that any company can just do it. Nokia spends $6 billion for R&D annually. For what? Apple spends $1 billion and is eating Nokia's lunch. On the basis of that metric alone, Nokia may still be overvalued, at a P/E of 18.

Europe is the next battleground that Nokia will lose. iPhone is penetrating heavily into this market (6-8 week wait times for iPhone in the Netherlands, for example), and Nokia's fallback will be the developing world. Guess what? They will lose that too, it's just a matter of time.

I also completely agree with the concept of too many products for Nokia. That mattered less when the devices were not part of a platform. Now that they are, too many configurations make their strategy a complete liability.

Want proof of that? Go on gazelle.com, and check the resale value for a used 3G iPhone in fair or good condition. That's right - a cell phone that you can resell after your contract is up. iPhone is so well made, so desirable, and has such a rapidly growing platform that they sell them used.

Now compare that with any Nokia and see what you find. The proof of that pudding is right there in the eating.]]> Mon, 21 Sep 2009 03:31:57 -0400
Nokia's problems are only too clear. Those 'economies of scale' that will make them so profitable in the future? Good luck with them, because they come shackled to a corporate bureaucracy that calls press conferences and makes PR announcements instead of executing anything.

Apple makes innovation look so simple and straightforward that it's easy to think that any company can just do it. Nokia spends $6 billion for R&D annually. For what? Apple spends $1 billion and is eating Nokia's lunch. On the basis of that metric alone, Nokia may still be overvalued, at a P/E of 18.

Europe is the next battleground that Nokia will lose. iPhone is penetrating heavily into this market (6-8 week wait times for iPhone in the Netherlands, for example), and Nokia's fallback will be the developing world. Guess what? They will lose that too, it's just a matter of time.

I also completely agree with the concept of too many products for Nokia. That mattered less when the devices were not part of a platform. Now that they are, too many configurations make their strategy a complete liability.

Want proof of that? Go on gazelle.com, and check the resale value for a used 3G iPhone in fair or good condition. That's right - a cell phone that you can resell after your contract is up. iPhone is so well made, so desirable, and has such a rapidly growing platform that they sell them used.

Now compare that with any Nokia and see what you find. The proof of that pudding is right there in the eating.]]> http://seekingalpha.com/article/162118-reading-palm-pre-sales-and-the-secondary-offering?source=feed#comment-682010 682010
You say "Apple...selling more than 5.4 million phones in its second quarter"...". This statement is incorrect on two counts.

First, Apple sold 5.2 million phones in the calendar second quarter. That can be seen here: www.apple.com/pr/libra...

The difference is minor, but because it's a published number, there is no reason to get it wrong, even by 3.85%.

Second, the calendar second quarter is Apple's fiscal 3rd quarter. Again, this is known, and precise use of relevant timeframe makes the point clear and correct, and avoids confusion.

Good research starts with details, not sloppiness, or pulling numbers that appear to be close enough.]]> Fri, 18 Sep 2009 01:53:15 -0400
You say "Apple...selling more than 5.4 million phones in its second quarter"...". This statement is incorrect on two counts.

First, Apple sold 5.2 million phones in the calendar second quarter. That can be seen here: www.apple.com/pr/libra...

The difference is minor, but because it's a published number, there is no reason to get it wrong, even by 3.85%.

Second, the calendar second quarter is Apple's fiscal 3rd quarter. Again, this is known, and precise use of relevant timeframe makes the point clear and correct, and avoids confusion.

Good research starts with details, not sloppiness, or pulling numbers that appear to be close enough.]]> http://seekingalpha.com/article/161850-100-gainers-and-their-estimated-p-es?source=feed#comment-679443 679443 Wed, 16 Sep 2009 13:43:00 -0400 http://seekingalpha.com/article/161042-motorola-s-cliq-builds-on-iphone-concept?source=feed#comment-671702 671702
That device, unlike the iPhone, is cluttered and messy. What's the value in that, even for free?

I'm sorry, but I'm just not convinced that Android offers anything yet, despite the fact that it's open source and all that business.]]> Fri, 11 Sep 2009 08:19:43 -0400
That device, unlike the iPhone, is cluttered and messy. What's the value in that, even for free?

I'm sorry, but I'm just not convinced that Android offers anything yet, despite the fact that it's open source and all that business.]]> http://seekingalpha.com/article/160996-buying-apple-today-like-buying-microsoft-in-1998?source=feed#comment-671610 671610
In 1998, Microsoft had established a massively dominant operating system and business suite (Office) business, as well as leading market shares in database, server, and other enterprise. There was little that it did in which it did not lead. Thus, its growth outlook was capped. It's ironic that Microsoft's current dominance in operating systems (93.06% for Microsoft vs. 4.87% for Mac via one measurement) is often used as the defense of investing in MSFT or against investing in AAPL. Such dominance is more risk than opportunity, for the company and for the shareholder.

Contrasted, there is no space in which Apple competes, other than music players (which have now declined to 18% of its revenue) where it holds more that 10% market share. Not desktop or laptop computers, and despite the success of iPhone, not mobile handsets.

Here's an open question for you. How can you financially value a business that is:

1. Already massive (200 million units sold worldwide for at least $400 per unit, or $80 billion)
2. Growing massively (20% year over year)
3. Technologically up for grabs
4. The next consumer-driven revolution
5. Led by hardware but followed by software

This, of course, is the smartphone market, and Apple's swiftly-growing position here on the technical side is somewhat muted by the manner in which it recognizes revenue via the 2-year subscription model. I am admittedly biased in favor of (long) Apple, but I believe that they are building an unassailable position in handsets and applications that go with them. Simply put, the competition is confused and scrambling, consumers are flocking, and Apple got 95% of the ecosystem right at exactly the point that the terrain was unclaimed.

One practical example - there is currently a 5-8 week wait time for iPhone 3GS at various T-Mobile locations in the Netherlands and at other carriers throughout Europe. At those same locations, you can obtain practically any other handset the same day, but Apple can't make theirs fast enough. What's next? China, of course, and perhaps that's even the reason why these handsets are in short supply currently.

And here's one point that should not be overlooked - Apple has 100 million credit card-registered iTunes users who have access to one-touch purchasing. This will swell, conservatively, by 4-6 million customer per quarter as iPhone and iPod touch devices require syncing and loading. No company on earth will have what Apple has within 2 years, and that's key to the software portion of the business.

Practically speaking, AAPL sees $7.50 earnings in 2010, which at a P/E of 30 yields a share price of $225.

So, in summary, Apple's potential rests upon this area in which they snuck in. Once there, they quickly established something simultaneously untouchable by competition and very appealing to consumers, and that's the appeal.

By the way, I think that you forget the 'not' in this sentence:

"Of course, if you're buying Apple, you're too terribly interested in the assets."]]> Fri, 11 Sep 2009 06:34:10 -0400
In 1998, Microsoft had established a massively dominant operating system and business suite (Office) business, as well as leading market shares in database, server, and other enterprise. There was little that it did in which it did not lead. Thus, its growth outlook was capped. It's ironic that Microsoft's current dominance in operating systems (93.06% for Microsoft vs. 4.87% for Mac via one measurement) is often used as the defense of investing in MSFT or against investing in AAPL. Such dominance is more risk than opportunity, for the company and for the shareholder.

Contrasted, there is no space in which Apple competes, other than music players (which have now declined to 18% of its revenue) where it holds more that 10% market share. Not desktop or laptop computers, and despite the success of iPhone, not mobile handsets.

Here's an open question for you. How can you financially value a business that is:

1. Already massive (200 million units sold worldwide for at least $400 per unit, or $80 billion)
2. Growing massively (20% year over year)
3. Technologically up for grabs
4. The next consumer-driven revolution
5. Led by hardware but followed by software

This, of course, is the smartphone market, and Apple's swiftly-growing position here on the technical side is somewhat muted by the manner in which it recognizes revenue via the 2-year subscription model. I am admittedly biased in favor of (long) Apple, but I believe that they are building an unassailable position in handsets and applications that go with them. Simply put, the competition is confused and scrambling, consumers are flocking, and Apple got 95% of the ecosystem right at exactly the point that the terrain was unclaimed.

One practical example - there is currently a 5-8 week wait time for iPhone 3GS at various T-Mobile locations in the Netherlands and at other carriers throughout Europe. At those same locations, you can obtain practically any other handset the same day, but Apple can't make theirs fast enough. What's next? China, of course, and perhaps that's even the reason why these handsets are in short supply currently.

And here's one point that should not be overlooked - Apple has 100 million credit card-registered iTunes users who have access to one-touch purchasing. This will swell, conservatively, by 4-6 million customer per quarter as iPhone and iPod touch devices require syncing and loading. No company on earth will have what Apple has within 2 years, and that's key to the software portion of the business.

Practically speaking, AAPL sees $7.50 earnings in 2010, which at a P/E of 30 yields a share price of $225.

So, in summary, Apple's potential rests upon this area in which they snuck in. Once there, they quickly established something simultaneously untouchable by competition and very appealing to consumers, and that's the appeal.

By the way, I think that you forget the 'not' in this sentence:

"Of course, if you're buying Apple, you're too terribly interested in the assets."]]> http://seekingalpha.com/article/160558-great-expectations-of-apple-events?source=feed#comment-667727 667727 Wed, 09 Sep 2009 06:33:17 -0400 http://seekingalpha.com/article/160323-microsoft-vs-apple-which-is-worth-more?source=feed#comment-665902 665902
1. Free cash flow? Which company excels in this category?

2. You mention that Microsoft has spent $9 billion per year, in the past 2 years, for R&D. I add to that point that Apple has spent about $1 billion. Unless Microsoft receives some kind of a beneficial financial treatment (ie tax incentives for allocating overhead toward R&D), it appears that Microsoft receives a poor ROI relative to Apple in this category, if revenue growth is a classified as the return. Please comment.

3. Apple has miniscule but rapidly growing shares in both computer and mobile device operating systems. Furthermore, Apple also has miniscule, but again rapidly growing, penetration in Japan, China, and European countries. Counter this with Microsoft, which has a 90%+ market share in computer OS, which is overall growing slowly, and a quickly fading position in mobile OS, which is overall growing quickly. That would seem to be opportunity for Apple and risk for Microsoft. Discuss.

4. Debt. Please compare. Note that Microsoft has gone from zero in 2008 to nearly $6 billion now. While the amount is relatively insignificant, the trend is concerning.

5. Please compare their retail strategies, noting that about 1 of every 8 dollars revenue for Apple comes via the Apple Stores, while Microsoft is only beginning a retail effort. Please characterize what value Microsoft, which is 95% software-oriented, will obtain from retail.

6. How did the year over year results of these companies compare during the downturn?]]> Tue, 08 Sep 2009 06:44:48 -0400
1. Free cash flow? Which company excels in this category?

2. You mention that Microsoft has spent $9 billion per year, in the past 2 years, for R&D. I add to that point that Apple has spent about $1 billion. Unless Microsoft receives some kind of a beneficial financial treatment (ie tax incentives for allocating overhead toward R&D), it appears that Microsoft receives a poor ROI relative to Apple in this category, if revenue growth is a classified as the return. Please comment.

3. Apple has miniscule but rapidly growing shares in both computer and mobile device operating systems. Furthermore, Apple also has miniscule, but again rapidly growing, penetration in Japan, China, and European countries. Counter this with Microsoft, which has a 90%+ market share in computer OS, which is overall growing slowly, and a quickly fading position in mobile OS, which is overall growing quickly. That would seem to be opportunity for Apple and risk for Microsoft. Discuss.

4. Debt. Please compare. Note that Microsoft has gone from zero in 2008 to nearly $6 billion now. While the amount is relatively insignificant, the trend is concerning.

5. Please compare their retail strategies, noting that about 1 of every 8 dollars revenue for Apple comes via the Apple Stores, while Microsoft is only beginning a retail effort. Please characterize what value Microsoft, which is 95% software-oriented, will obtain from retail.

6. How did the year over year results of these companies compare during the downturn?]]> http://seekingalpha.com/article/158970-apple-s-iphone-gets-a-foot-in-china-s-door-with-china-unicom?source=feed#comment-653658 653658
I agree with Mr. Butterfield on several counts. First, the media and analysts have been sleeping, which implies to me that the market hasn't begun to value this launch (ie that the stock price is still undervalued). Second, 14 million iPhones sounds like a reasonable number to me as well.

Also agree with Brian Marshall. This was exactly why Phil Schiller mentioned the 200% growth (from 25 million users to 75 million) of OS X since the introduction of iPhone and iPod Touch. What Apple is doing is using the elegance of their handheld operating system, to sway users to completely convert to Mac. Works for me.]]> Sun, 30 Aug 2009 14:29:43 -0400
I agree with Mr. Butterfield on several counts. First, the media and analysts have been sleeping, which implies to me that the market hasn't begun to value this launch (ie that the stock price is still undervalued). Second, 14 million iPhones sounds like a reasonable number to me as well.

Also agree with Brian Marshall. This was exactly why Phil Schiller mentioned the 200% growth (from 25 million users to 75 million) of OS X since the introduction of iPhone and iPod Touch. What Apple is doing is using the elegance of their handheld operating system, to sway users to completely convert to Mac. Works for me.]]> http://seekingalpha.com/article/158214-are-things-falling-apart-at-apple-s-app-store?source=feed#comment-645896 645896
The new pattern among tech bloggers is, "If it bleeds Apple juice, it leads..."

Even if they must fabricate stories or erroneously extrapolate news from a tiny portion of unsatisfied customers or developers.]]> Tue, 25 Aug 2009 15:30:44 -0400
The new pattern among tech bloggers is, "If it bleeds Apple juice, it leads..."

Even if they must fabricate stories or erroneously extrapolate news from a tiny portion of unsatisfied customers or developers.]]> http://seekingalpha.com/article/155844-the-case-for-shorting-apple?source=feed#comment-627817 627817
Then he uses technical analysis to confound the discussion. Technical analysis which shows, by the way, that AAPL's share price behavior in April and May could have been called a reversal at the time, had it not continued to rise.

Pretty flimsy case, I would say. Please compare Apple's non-GAAP earnings and free cash flow to Google. Then see which stock is undervalued.]]> Thu, 13 Aug 2009 07:55:55 -0400
Then he uses technical analysis to confound the discussion. Technical analysis which shows, by the way, that AAPL's share price behavior in April and May could have been called a reversal at the time, had it not continued to rise.

Pretty flimsy case, I would say. Please compare Apple's non-GAAP earnings and free cash flow to Google. Then see which stock is undervalued.]]> http://seekingalpha.com/article/153414-smartphone-supply-demand-imbalance-looms?source=feed#comment-622186 622186
This is why the people arguing that AT&T should drop its prices for iPhone are missing the point. AT&T is measuring the point at which new subscriptions fall off (even with the addition of new iPhone models) and once that occurs, they will move the price of their voice and data plans downward.

Why would any business settle for less money than the market will bear? I wouldn't invest in a business like that. Apple has a groundbreaking device, and I want them to extract maximum revenue from every customer. That's just good business.]]> Sun, 09 Aug 2009 14:18:08 -0400
This is why the people arguing that AT&T should drop its prices for iPhone are missing the point. AT&T is measuring the point at which new subscriptions fall off (even with the addition of new iPhone models) and once that occurs, they will move the price of their voice and data plans downward.

Why would any business settle for less money than the market will bear? I wouldn't invest in a business like that. Apple has a groundbreaking device, and I want them to extract maximum revenue from every customer. That's just good business.]]> http://seekingalpha.com/article/154965-cautious-on-apple-s-plan-to-extend-digital-payment-processing-business?source=feed#comment-622154 622154
Let's walk through this logically, taking Facebook as an example. Last time I checked, there is no mechanism to enter a credit card number on Facebook. In fact, I would venture a guess that Facebook would have difficulty getting that information, because users just don't think of it as someplace that has the potential to cost them money. Even if they have a billion users, the chances of them getting acceptance for this step is low.

Contrast that with Apple. They have sold more than 250 million iPods that connect with iTunes, and which have payment entry built into their registration up front. They have another 26 million iPhone users with iTunes credit card registration as a requirement for syncing data, for software updates and for app purchases.

In other words, Apple is probably approaching a quarter billion devices using iTunes. If we conservatively assume that even 30% of users are unique and have entered payment information, that's close to 70 million unique payer records.

Let's take that one step further. How many credit card holders does Citibank have? Bank of America? MBNA? Capital One? I would wager that these four together don't have many more than 70 million unique payer records. How could it be then, that Apple's cost per transaction could be higher than any of these credit card providers, and if by some strange reason it is, what would that say about the likelihood of Facebook establishing a cost-effective payment system starting with ZERO users?

Did you really think this through, or did you just want to attract clicks through an Apple-bashing headline?

I would wager the later.]]> Sun, 09 Aug 2009 13:57:04 -0400
Let's walk through this logically, taking Facebook as an example. Last time I checked, there is no mechanism to enter a credit card number on Facebook. In fact, I would venture a guess that Facebook would have difficulty getting that information, because users just don't think of it as someplace that has the potential to cost them money. Even if they have a billion users, the chances of them getting acceptance for this step is low.

Contrast that with Apple. They have sold more than 250 million iPods that connect with iTunes, and which have payment entry built into their registration up front. They have another 26 million iPhone users with iTunes credit card registration as a requirement for syncing data, for software updates and for app purchases.

In other words, Apple is probably approaching a quarter billion devices using iTunes. If we conservatively assume that even 30% of users are unique and have entered payment information, that's close to 70 million unique payer records.

Let's take that one step further. How many credit card holders does Citibank have? Bank of America? MBNA? Capital One? I would wager that these four together don't have many more than 70 million unique payer records. How could it be then, that Apple's cost per transaction could be higher than any of these credit card providers, and if by some strange reason it is, what would that say about the likelihood of Facebook establishing a cost-effective payment system starting with ZERO users?

Did you really think this through, or did you just want to attract clicks through an Apple-bashing headline?

I would wager the later.]]> http://seekingalpha.com/article/153198-are-camera-phones-killing-the-digital-camera?source=feed#comment-612079 612079
Have a look here for the data showing that iPhone is now the single most popular camera by user on Flickr:

www.flickr.com/cameras/

(You may need to log in.)

What this tells me is the following:

1. iPhone, at 3 megapixels is capable of taking very good shots in the right conditions
2. Convenience is a leading factor
3. Cameras will never, ever beat mobile phones for sheer numbers, and thus will be snowed under in terms of users

I also take issue with your use of intention surveys relative to metrics that measure actual behavior. Why would you use a proxy when the real data sits in front of you?]]> Sun, 02 Aug 2009 18:33:16 -0400
Have a look here for the data showing that iPhone is now the single most popular camera by user on Flickr:

www.flickr.com/cameras/

(You may need to log in.)

What this tells me is the following:

1. iPhone, at 3 megapixels is capable of taking very good shots in the right conditions
2. Convenience is a leading factor
3. Cameras will never, ever beat mobile phones for sheer numbers, and thus will be snowed under in terms of users

I also take issue with your use of intention surveys relative to metrics that measure actual behavior. Why would you use a proxy when the real data sits in front of you?]]> http://seekingalpha.com/article/149344-earnings-on-deck-three-companies-that-look-the-best?source=feed#comment-608496 608496
PFE and BSX are up much less than AAPL in this same period. AMD is down.

Back to the drawing board with your stock picking tools.]]> Thu, 30 Jul 2009 14:19:15 -0400
PFE and BSX are up much less than AAPL in this same period. AMD is down.

Back to the drawing board with your stock picking tools.]]> http://seekingalpha.com/article/152358-roger-mcnamee-judgment-day-on-pre-vs-iphone?source=feed#comment-608476 608476
He doesn't really care how many Pre's were sold and whether people are switching from iPhone to Pre. Well, maybe he cares a little. But that's not the point.

He really cares a lot the PALM share price and how much he can pump that up with the impression that we're going to have a good old fashioned rocket stock once investors figure out how big the Pre is going to be. He bought 8.2 million shares in March, at $6 per share, and his bluster of comments were intended to wring even more return out of the stock than the 150% he's up already.

This is all a game of perception. Who really cares how many phones Palm sells or when they will become profitable again?

I was actually fascinated to note that PALM traded about $500 per share back at the end of the Dot Com bubble. It's no stranger to this kind of behavior. Old Roger Ponytail and Bono, gettin' rich together.]]> Thu, 30 Jul 2009 14:09:17 -0400
He doesn't really care how many Pre's were sold and whether people are switching from iPhone to Pre. Well, maybe he cares a little. But that's not the point.

He really cares a lot the PALM share price and how much he can pump that up with the impression that we're going to have a good old fashioned rocket stock once investors figure out how big the Pre is going to be. He bought 8.2 million shares in March, at $6 per share, and his bluster of comments were intended to wring even more return out of the stock than the 150% he's up already.

This is all a game of perception. Who really cares how many phones Palm sells or when they will become profitable again?

I was actually fascinated to note that PALM traded about $500 per share back at the end of the Dot Com bubble. It's no stranger to this kind of behavior. Old Roger Ponytail and Bono, gettin' rich together.]]>